GRN, Dutch partners ink MoU
Government on Tuesday concluded agreements for the establishment and management of Namibia’s sovereign wealth fund SDG Namibia One, the exercise of the GRN’s option to take up a 24% interest in the first awarded project being developed by Hyphen, and the signing of a memorandum of understanding (MoU) between a coalition of Namibian and Dutch partners.With the conclusion of these milestones, government has taken a significant step towards realising the potential of the transformative green hydrogen sector for the benefit of all Namibians.
Government, delivering on the vision of the first hydrogen valley to be developed, the Southern Corridor Development Initiative (SCDI), recognised the need to strategically mobilise billions of Namibia dollars of funding in a manner that does not place additional fiscal burdens on the country.
In raising the necessary funding, government sought partners to assist in its realisation and has developed relationships with the European Union as a block, and the countries of the Netherlands and Germany specifically.
The establishment of SDG Namibia One will see the Environment Investment Fund (EIF) partnering with two Dutch organisations, Climate Fund Managers and Invest International. One hundred per cent of the initial funding of €40 million (about N$850 million) is being provided as grant funding by Invest International.
This vehicle will look to raise money from local institutional investors and investors from around the world to develop Namibian green hydrogen projects and related infrastructure.
The European Investment Bank and government concluded a letter of intent at COP27 for the raising of €500 million, a portion of which is to be proposed to be designated for investment via SDG Namibia One.
Blended financing
SDG Namibia One is a €1 billion blended financing vehicle for green hydrogen investment in Namibia. The platform is managed by Nam-H2 Fund Managers, a partnership between the EIF in Namibia, Climate Fund Managers, and Invest International from the Netherlands.
With agreements for the establishment of SDG Namibia One concluded, government-issued Hyphen with its Official Notice indicating the exercise of Namibia’s right to take up a 24% equity interest in the project at historic cost.
“This marks yet another key progressive milestone in the development of a local and transformative Synthetic Fuels Sector,” finance minister Ipumbu Shiimi said.
The signing of the MoU between Namport, the Port of Rotterdam, Hyphen, Gasunie, NamPower and Invest International represents the strategic intent of these partners to work together to realise the vision of the SCDI.
To be developed in the most environmentally sustainable way, the SCDI could ultimately span the length of the //Kharas Region with an annual production capacity of 3 million tonnes of green hydrogen.
The development will initially be anchored by the Port of Lüderitz for access to international markets with the development of hydrogen pipelines to connect to South Africa in the medium to long term.
The realisation of the SCDI will generate significant energy propelling Namibia to become energy self-sufficient, improve regional energy security by exporting excess electricity to the Southern Africa Power Pool and will supply various international ports, including the Port of Rotterdam with clean molecules to decarbonize hard-to-abate sectors.